Millions of Americans on Affordable Care Act (ACA) healthcare plans are set to face over a twofold rise in their monthly health insurance premiums from January after the U.S. Congress failed to extend the COVID-era ACA tax credits.
In 2021, the U.S. granted enhanced premium tax credits for those who buy insurance through the ACA, commonly known as Obamacare, Exchanges, and two years later, the Biden administration’s Inflation Reduction Act extended those benefits until the end of 2025.
According to the healthcare policy research organization KFF, enrollments in the ACA Marketplace soared past 24M during the period, from about 11.4M in 2020.
However, President Donald Trump’s signature tax and spending package, the One Big Beautiful Bill Act, which passed in July, didn’t include extensions to the expiring subsidies. With the Congress in gridlock over the issue since then, even causing the longest government shutdown in U.S. history, the fate of enhanced tax credits was all but sealed.
In December, the Senate failed to clear a pair of dueling legislations that, as part of a GOP proposal, would have provided an alternative to the expiring tax credits, or, under a Democratic plan, would have provided a three-year extension to the subsidies.
As the stalemate continued, as many as 22M Americans could face a 114% rise in their monthly health insurance premiums from Jan. 1, when the One Big Beautiful Bill Act takes effect, KFF projected in September.
Earlier this year, the Congressional Budget Office estimated that a permanent extension to Obamacare subsidies could have expanded the U.S. budget deficit by $350B over the next ten years. In September, the agency warned that more than 4M Americans were at risk of becoming uninsured in 2034 if enhanced subsidies were allowed to lapse by Dec. 31.
Leading players in the ACA Marketplace include managed care organizations UnitedHealth (UNH), CVS Health (CVS), Centene (CNC), Cigna (CI), Elevance Health (ELV) and Oscar Health (OSCR).